The adoption of a next generation cloud-based financial management application and a strategic approach prior to implementation can help transform the Finance function into a strategic business partner and solve many of challenges that traditional Finance functions face. Over the next several weeks, we will take a deep dive into four strategies to help finance make this transition.
The first step in transforming the Finance function is to align the solution to the business objectives and define the business outcomes that the solution must deliver. This provides the principles that will guide the project and drive decision-making. Every successful organization has a mission statement and strategy to drive the direction of the company; Finance organizations need to set a vision and strategy to drive the success of their financial management system.
You can’t define a financial management system strategy without first understanding the organizational strategies. Gather and review the business, finance, and information technology strategies to align stakeholder perspectives and to ensure that the vision for transformation is in sync with the corporate strategies.
People, Process & Technology
As you prepare to set your vision, don’t just focus on the technology. Changing the technology without optimizing processes, aligning employees to support the vision, and improving the workforce experience will likely result in the same inefficiencies, challenges, and limited business value that came with the previous technology solution.
Strategic Finance is created through a holistic approach to people, process and technology change. Defined business outcomes drive business process and organizational change to reduce the risk and increase the value associated with large-scale investments in Finance technology.
The Building Blocks of Strategic Finance
Today’s Finance organizations are being challenged to evolve and deliver more value to the business. A Saugatuck Technology Inc. research report that surveyed more than 270 Finance and IT executives indicates that one of the primary needs for a cloud-based financial management application is because Finance needs more and betters ways to deliver more value to the business.
Finance is not only expected to provide their traditional role of transaction processing, control, planning and financial reporting, but also be a strategic business partner by providing meaningful and interpreted information to help make timely decisions.
Both the traditional and strategic roles of the Finance function are essential for the success of the business. A video with Mark Nittler, VP of Financial Applications Strategy at Workday discusses the importance that CFO’s are placing on on their strategic role and how Workday Financials, Workday’s cloud-based finance application reduces the time spent in the traditional role while providing the tools to enable the strategic role.
Set Your Vision
Developing a strategic vision for a financial management application should focus on outcomes that reduce deficiencies and time spent in the traditional role to enable the desired outcomes in the strategic role. Your strategic vision should include five key components.
1. A Strategic Purpose Statement or Value Proposition that is intended to be a variation of a mission statement specifically used to highlight how traditional finance, strategic finance and underlying technologies align to achieve the organizational strategy.
Example: Provide agile and efficient financial systems that enables Finance to be a business partner by providing meaningful and interpreted financial information with a focus on key business drivers to make timely decisions.
2. Guiding Principles become the organizational promises that the strategy will deliver and are the anchors for how you will make decisions over the course of the technology implementation. You should typically have 4 to 6 guiding principles.
Example: Trusted and Meaningful Data, Business Value, Simplicity and Efficiency, Integrated and Agile
3. The Defining Attributes represent what specific behaviors or actions are expected to be demonstrated in alignment of each guiding principle.
Example: Provide data and information direct to managers and leaders and also the power to do something about it.
4. The Workforce Experience defines how you want your users to experience the new technology and processes.
Example: Able to perform daily analysis of business functions through a mobile dashboard.
5. Key Outcomes & Measures are used to ensure that the project and underlying technology is delivering upon the promise being made with each Guiding Principle and Defining Attribute.
Example: Decrease the accounting close cycle.
Instead of rushing into a Finance technology implementation, take the time to set a strategic vision to ensure that the desired outcomes and expected business value remain the focus throughout the implementation. This will put you on a path for a successful transformation of the Finance function.